20 percent down, Snap Originals canceled in major restructuring –

Snap will lay off about 20% of its workforce on Wednesday, according to a memo sent to employees by Snap CEO Evan Spiegel. The layoffs will eliminate more than 1,200 jobs and the company expects to save about $500 million.

“The scope of these changes varies from team to team, depending on priorities and the level of investment required to meet our strategic priorities,” Spiegel wrote. “The size of these cuts should substantially reduce the risk of this happening again, balancing our desire to invest in our long-term future and accelerating our earnings growth.”

Employees affected by the cuts will receive at least four months of leave, with the company informing shareholders that it will receive $175 million in termination and contract reduction charges.

Spiegel also revealed a complete restructuring of the company, which will lead to a review of its efforts in certain key areas. As a result, the company’s Snap Originals content will no longer be promoted and content from creators and partners will be prioritized.

Snap Originals is company-sponsored original programming. This year’s contest included programs from the D’Amelio family and gymnast Simone Biles. The company says that all programs that have already been ordered will work as planned.

“Our content business remains a priority. We’re proud of the work we’ve done to empower creators and partners to tell great stories on Snapchat,” said a spokesperson for Snap.

good luck americaThe first Snap Original, led by Snap executive Peter Hamby, will continue to run, as will shows created by platform partners such as NBC News. Stay tunedand ESPN Sports centeradded the spokesperson.

The company expects to save about $50 million a year by eliminating the originals.

But original programming wasn’t the only line of business to shrink.

Spiegel wrote that the company is restructuring itself “to increase focus on our three strategic priorities: community growth, revenue growth and augmented reality.”

As a result, the mini and games, standalone apps from the company Voisey and Zenly and the investment in hardware will be significantly reduced (in the case of Spectacles) or completely reduced (in the case of the Pixy drone).

Additionally, Spiegel announced that Snap Senior Vice President of Engineering Jerry Hunter will be promoted to COO, effective immediately.

Snap, which said it had 6,446 full-time employees in its second-quarter earnings report, has been particularly hit by falling ad revenue, supply chain disruptions, changes to Apple’s iOS privacy and the ongoing war in Ukraine. . In May, ahead of second-quarter earnings, the company announced that it would not meet lower revenue and EBITDA targets because “the macroeconomic environment has deteriorated faster and faster than expected.”

In the company’s July letter to investors, Snap CEO Evan Spiegel said the company would make “substantially reduced hiring” and seek to cut other operating expenses. Snap also said it would not issue guidance for the third quarter “due to uncertainties related to the operating environment”.

“We are not satisfied with the results we are delivering despite opposition,” Spiegel said at the time.

On Wednesday, Snap said its quarterly revenue growth increased by about 8% year-over-year.

Snap shares are down more than 70 percent in the past six months, but Wall Street’s initial response on Wednesday was positive.

Snapchat’s parent company last laid off employees in 2018, with 22 employees, including some on the content team, laid off. The layoffs planned for Wednesday will affect significantly more employees.